Food prices in ‘biggest fall’ for a year in June
If ever there was a story to look back on for a “before and after”, bearing in mind a large proportion of our food comes from outside the UK – compare the July results in due course to this – food’s going to get a lot more expensive….
Grocery prices fell 0.8% in June, extending May’s 0.3% fall and marking the deepest deflation in food for over a year, according to the British Retail Consortium-Nielsen Shop Price Index.
Shop prices overall, including non-food items, fell 2% year-on-year, marking the 38th consecutive month of decline.
The BRC said it was an “extraordinary run of deflation”.
However, the retail trade body said it eventually expected prices to rise again.
“The time it takes for any price increases to make a reappearance will depend on a combination of factors including the future value of the pound, commodity prices and any eventual impact of the Brexit vote on input costs,” said BRC chief executive Helen Dickinson.
The shop price index reflects the period ahead of the referendum vote from 6 to 10 June.
The sharp fall in the pound, which has plunged about 11% against the US dollar since the outcome of the EU referendum vote, has led several analysts to warn that the price of groceries could rise longer term.
Some 40% of food consumed in the UK is imported meaning any long-term shift in exchange rates could lead to higher food costs.